Portland Appraisal Blog

Why is an Appraiser Asking Me About an Old Comp?

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“Why is an appraiser asking me about an old comp?” In the course of my work, I have elicited that question from quite a few agents and brokers. One agent said, “I thought you guys could only use comps going back 6 months.” Another replied back to me: “Please, why you would use a comp from 2.5 years ago when there have been many[,] many sales in this development just in the last year?” When I told her why, she replied: “How interesting. Thank you for clarifying.”

Since this question keeps popping up, I thought it might be helpful to address it with a blog post.

The appraisal report is not for lending: The overwhelming majority of appraisal reports are written for a lending institution due to a sale or refinance—certainly over 90% and most likely approaching 99.9%. So, it’s understandable why an agent might be skeptical about an appraiser querying them about a sale they closed over a year ago or, sometimes, a few years ago. Is this appraiser clown going to screw up someone’s deal by using a dated comp?

No. Sometimes the report is not for lending and the effective date of value is not contemporary but is a point in the past. Examples:

Estate Tax: When a family member with property passes away an appraisal report with a valuation date as of the date of death is often needed. Sometimes years might pass by before this legal requirement is understood by the family and an appraisal report is ordered.
Legal Disputes: Problems can arise between neighbors that is brought to litigation. If someone is attempting to prove damages to their property multiple values may be needed: one contemporary and one prior to the start of the problem. A good example of this is a view encroachment by a neighbor. Views often add a considerable amount to a property’s total value and when a neighbor blocks a scenic view lawsuits can fly!

The appraisal report is for lending, but the property is complicated: The ideal appraisal report, for a lending job, would contain three sales that have closed within the last 90 days and those sales would match each and every attribute of the subject be they physical or locational. The real world is seldom ideal, and the property the appraiser is working on might have some unusual physical attributes or complicating factors. These factors might include:

A home with an owned solar system in a market where very few sales have solar.
An unusually large or unusually small house.
A home that is lakefront or riverfront.
A home on acreage in an area where few similar sales have occurred.
A home with some adverse locational influence like a cell tower, power lines, or a large water tank behind it.
A home in a small prestigious subdivision that has had few recent sales.
A home on a city lot that is divisible.
A home that is a borderline tear down.

There are many other reasons, but the above suffices to show how complicated things can get. The only way to figure out how much that cell tower looming over the backyard is affecting the subject’s value is to pull similar comps, even if they are dated, and examine the conditions of their sale. For one report I recently completed, a PGE power transmission tower was on the site. (The home was on about 20 acres.) I carefully followed all major power transmission lines within a radius that took in tens of miles. I finally found one property that had a transmission tower on it and phoned the agent. Even though the sale was five years old she had a vivid recollection of it—not surprising because it was an unusual sale for her—and we discussed the impact on value.

Keep in mind too, a report may have more than three comparables; sometimes a fourth, fifth, or even sixth comparable might be used to tighten the report and the developed opinion of value. (I’ve had to use nine comps on occasion.) A home selling right next door to the subject is about as good as it gets when it comes to bracketing location and might merit inclusion in a report even if it did sell more than a year ago.

An appraiser can account for time: Appraisers have a variety of analytical tools at their disposal and can adjust for time once the proper data analysis is performed. I frequently have to grid older sales since I specialize in the valuation of complicated properties. It is amazing how often a much older sale will line up with a sale that occurred just a few weeks ago once the proper adjustment is made. Doing this has allowed me to demonstrate with verifiable market data that a certain aspect of the subject really does not have a significant impact on value. This has prevented me from accidentally under-appraising a property—something the seller (and their agent) often appreciates!

It’s never good when an appraiser makes a wild guess about something. Data, even older data, can make all the difference in the world. So, if I, or another appraiser, reach out to you about an older sale, rest assured, we have a valid reason for doing so and your recollections might even help save a fellow agent’s deal!

Crestwood—Neighborhood Analysis of Single-Family Residential Homes (November 2019)

The Crestwood neighborhood is part of the Southwest portion of Portland and is one of the periphery neighborhoods. This neighborhood is largely residential with minor commercial and one city park (Dickinson). This neighborhood has a overlapping section with the adjacent Ashcreek, but that small section is omitted in the following analysis.

Appraisers endeavor to take the measure of a neighborhood with a variety of tables, charts, and graphs. It helps them to frame the value opinion and see how the subject property relates to the neighborhood as a whole. Before we dive in, a…

Quick Note

The following information is based on detached single-family residential homes that were sold and/or listed on the open market as reported by RMLS—the primary MLS service for the City of Portland. Data was pulled from the year 2000 to the present date. The data export was checked, validated, and scrubbed of obvious errors using custom tools developed by the author. With that out of the way, let’s look at some neighborhood stats.

Neighborhood Statistics Overview

The following table summarizes important metrics for the neighborhood. Each column is independent of the others and the basement square foot column reflects only properties with a basement.

Approximately 3% of sales in the neighborhood were new constructions.

The following scatter plot shows all closed-sale detached single-family residences (with a red trendline):

The neighborhood suffered during the housing crisis, but has recovered with prices generally higher than they were before the crash. The following chart shows quarterly average and median sales prices over the last two years:

Percentile rank is a way of seeing price bands for the neighborhood. For instance, the 50th percentile, or median rank, shows that half of all sales since the year 2000 have been under $279,900. Prices are fairly clustered all the way up to the 90th percentile:

The following table shows important marketing information for both the last two years and since the year 2000:

The “SP/OLP” label stands for “sales price/original list price” ratio. This is an important metric, as it shows what the particular property sold for relative to the original list price that was advertised. The “SP/LP” column tracks what the sales price was relative to the final published list price. This column, while not as important as the first one, still yields important insights as to the direction of negotiations. The “DOM” column tracks the days on market for all properties sold and listed and helps frame expected marketing time. Finally, the “CtL” label stands for “contract-to-list” ratio. It is the number of pending sales divided by the total number of listings. A low ratio means many properties are sitting on the open market waiting for offers. A high ratio indicates properties are being absorbed by the market quickly, commonly referred to as a “seller’s market.”

As of this post date, there are more properties under contract than waiting for an offer.

The following table more closely examines DOM as well as CDOM (cumulative days on market). CDOM is also an important metric as homes are often taken off the market and then subsequently relisted (typically at a lower price). The CDOM metric can give you a better idea of total expected marketing time. The table breaks out DOM & CDOM by price segment:

Let’s wrap up the neighborhood statistics overview with the following table showing the sales terms in the market over the last two years:

Conventional financing is predominant, with the majority of the remaining sales being cash buyers or buyers using FHA financing.

Let’s conclude our tour of Crestwood with a histogram analysis of the neighborhood:

Histogram Analysis

Age

Most properties in the neighborhood are between 30-69 years of age.

Bathroom Count

A home with two full bathrooms is the most typical for the market.

Bedroom Count

The vast majority of homes are have either three of four bedrooms.

Garage Stall Count

Most homes in the neighborhood have a two-car garage.

Total Square Footage

This metric includes above-grade living area and basement space for a combined figure. The median total square footage for the neighborhood is ~1,800 sq. ft.

Gross Living Area

Gross living area only consider non-basement living space. Often the market reacts more strongly to gross living area, usually applying a discount to basement space. Median gross living area is approximately 1,400 sq. ft.

Level Count

The majority of properties are two levels in this neighborhood, although a single-level is very common.

Lot Size

The median lot size for home in the neighborhood is ~9,150 sq. ft.

Sales Price

This histogram includes sales prices over a 20-year period. The median sales price over the last 20 years is: ~$280,000; and the median sales price over the last 2 years is: $437,000.

The highest sales price obtained in the neighborhood (on the open market) was $1,095,000 on 10/16/2018. The home was a new construction at the time of the sale and has 4,050 total square feet.

# of Sales

The number of sales in the neighborhood have been trending lower this year as compared to the previous two.

So, there you have it, a market overview for the Crestwood neighborhood!

Appraisal Reports

If you are a homeowner and are looking to sell your home, you would greatly benefit from a prelisting appraisal. Our firm will bring high-level analytics to your report and give you a sound understanding of the current market.

If you are an agent and need detailed neighborhood analysis, or analysis of specific areas or specific segments of the market, please contact us and we can generate a custom report to help you frame a listing price for your client!

Far Southwest—Neighborhood Analysis of Single-Family Residential Homes (August 2019)

The Far Southwest neighborhood is just that—far southwest! It represents one of the periphery neighborhoods of the City of Portland. The neighborhood is largely dominated by the Portland Community College Sylvania Campus. The campus was opened in 1968 and has approximately 28,000 students enrolled each year.

Quick Note

Neighborhood Statistics Overview

The following table summarizes important metrics for the neighborhood. Each column is independent of the others and the basement square foot column reflects only properties with a basement.

Approximately 6% of sales in the neighborhood were new constructions.

The following scatter plot shows all closed-sale detached single-family residences (with a red trendline):

The neighborhood suffered during the housing crisis, but has recovered with prices generally higher than they were before the crash. The red trendline shows prices have leveled and have even dipped a bit. This is further borne out by a review of average and median sales prices over the last two years:

Percentile rank is a way of seeing price bands for the neighborhood. For instance, the 50th percentile, or median rank, shows that half of all sales since the year 2000 have been under $340,350. Prices are fairly clustered all the way up to the 90th percentile:

The following table shows important marketing information for both the last two years and since the year 2000:

As of this post date, there are more properties waiting for offers than are under contract.

Let’s wrap up the neighborhood statistics overview with the following table showing the sales terms in the market over the last two years:

While conventional financing is predominant, there is a substantial cash market.

Let’s conclude our tour of South Portland with a histogram analysis of the neighborhood:

Histogram Analysis

Age

Most properties in the neighborhood are between 10-44 years of age.

Bathroom Count

A home with two full bathrooms and one half bathroom (powder room) is the most typical for the market.

Bedroom Count

The vast majority of homes are have either three of four bedrooms.

Garage Stall Count

Most homes in the neighborhood have a two-car garage.

Total Square Footage

This metric includes above-grade living area and basement space for a combined figure. The median total square footage for the neighborhood is ~2,400 sq. ft.

Gross Living Area

Level Count

The majority of properties are two levels in this neighborhood.

Lot Size

The median lot size for home in the neighborhood is ~10,000 sq. ft.

Sales Price

This histogram includes sales prices over a 20-year period. The median sales price over the last 20 years is: ~$340,000; and the median sales price over the last 2 years is: $437,000.

The highest sales price obtained in the neighborhood (on the open market) was $1,095,000 on 10/16/2018. The home was a new construction at the time of the sale and has 4,050 total square feet.

# of Sales

The number of sales in the neighborhood have been trending higher this year as compared to the previous one.

So, there you have it, a market overview for the Far Southwest neighborhood!

Appraisal Reports

Lake Oswego—Neighborhood Analysis of Waterfront Single-Family Residential Homes (July 2019)

Oswego Lake is a scenic and picturesque former channel of the Tualatin River. It is a natural feature, but has been enlarged due to a dam to its present size of ~395 acres. Many homes rim the lake as well as the smaller bays connected to it. Some of the properties surrounding Oswego Lake are among the more expensive in the Greater Portland Area.

Quick Note

The following information is based on detached single-family residential homes that were sold and/or listed on the open market as reported by RMLS—the primary MLS service for the City of Lake Oswego. Data was pulled from the year 2000 to the July 2019. The data export was checked, validated, and scrubbed of obvious errors using custom tools developed by the author. With that out of the way, let’s look at some neighborhood stats.

Neighborhood Statistics Overview

The following table summarizes important metrics for the neighborhood. Each column is independent of the others and the basement square foot column reflects only properties with a basement.

There has been relatively little new construction along the lake with ~3.8% of all sales/listings over the past 20 years having been new homes.

The following scatter plot shows all closed-sale detached single-family residences (with a red trendline):

Percentile rank is a way of seeing price bands for the neighborhood. For instance, the 50th percentile, or median rank, shows that half of all sales since the year 2000 have been under $1.29 million. Prices are fairly clustered up to the 70th percentile where the upper range begins to balloon:

The following table shows important marketing information for both the last two years and since the year 2000:

As of this post date, there are more properties waiting for offers than are under contract.

Let’s wrap up the neighborhood statistics overview with the following table showing the sales terms in the market over the last two years:

Unsurprisingly, there is a substantial cash market among waterfront homes.

Let’s conclude our tour of waterfront properties in Lake Oswego with a histogram analysis of the market:

Histogram Analysis

Age

The median age for the waterfront market is 55 years; however, a substantial number of properties are 35 years old or newer.

Bathroom Count

Two to four bathroom homes are typical for the market.

Bedroom Count

The vast majority of homes have between three to five bedrooms.

Garage Stall Count

Most properties have either a two or three-car garage.

Total Square Footage

This metric includes above-grade living area and basement space for a combined figure. The median total square footage around the lake is ~3,600 sq. ft.

Gross Living Area

Level Count

The majority of properties are two to three levels.

Lot Size

There are some acreage properties along the lake, however, the median lot size is 0.21 acres (~9,150 sq. ft.).

# of Sales

The number of sales along the lake have been trending higher this year as compared to the previous two.

Sales Price

This histogram includes sales prices over a 20-year period. The median sales price over the last 20 years is: $1,290,000; and the median sales price over the last two years is: $1,765,000.

The highest sales price obtained among waterfront properties in Lake Oswego (on the open market) is $6,950,000 on 6/20/2000. The home is nearly 14,000 square feet; sits on 1.65 acres; has 7 bedrooms; 9 full bathrooms and 4 half bathrooms (powder rooms) and custom European-style architecture.

The highest listing was for $19,500,000. This was for the property on Jantzen Island.

It is the only private island on Oswego Lake. The home sits on 5 acres, is 13,500 square feet, and is reachable by a gated private bridge. According to an article in the The Oregonian, the property was purchased for $2.2 million in cash back in 1987. $5 million was spent improving the property and it was listed on 9/08/2008 for nearly $20 million. It stayed on the market for that price for more than a year and a half before the listing was cancelled. It was relisted again about a half year later at a reduced price of $15 million, but it stayed on the market for over three years without selling. Had, it sold for even $10 million, it would have set a record for the Lake Oswego market.

So, there you have it, a market overview of waterfront properties on Oswego Lake!

Appraisal Reports

South Portland—Neighborhood Analysis of Single-Family Residential Homes (July 2019)

The South Portland neighborhood is one of Portland’s waterfront communities, bordering the Willamette River. It is connected to the east side of the city via four bridges and boasts some of the city’s modern skyscrapers—including the John Ross Tower, Portland’s largest residential structure. Shopping, fine dining, numerous parks, recreation, OHSU with its aerial tramway, and major employment centers are all features of this dynamic neighborhood.

Despite being part of Portland’s urban core, the South Portland neighborhood has a thriving detached single-family home market.

Quick Note

Neighborhood Statistics Overview

The following table summarizes important metrics for the neighborhood. Each column is independent of the others and the basement square foot column reflects only properties with a basement.

There has been relatively little new construction in the neighborhood with ~5.8% of all sales having been new homes.

The following scatter plot shows all closed-sale detached single-family residences (with a red trendline):

Percentile rank is a way of seeing price bands for the neighborhood. For instance, the 50th percentile, or median rank, shows that half of all sales since the year 2000 have been under $359,000. Prices are fairly clustered up to the 90th percentile where the upper range begins to balloon:

The following table shows important marketing information for both the last two years and since the year 2000:

As of this post date, there are more properties waiting for offers than are under contract. The CtL is a fluid metric, however, and may not be indicative of long-term trends.

Let’s wrap up the neighborhood statistics overview with the following table showing the sales terms in the market over the last two years:

While conventional financing is predominant, there is a substantial cash market.

Let’s conclude our tour of South Portland with a histogram analysis of the neighborhood:

Histogram Analysis

Age

Most properties in the neighborhood are over a half century old. With the oldest home being a 920 sq. ft. cottage built while Abraham Lincoln was still president of the United States.

Bathroom Count

A two-bathroom home is the most typical for the market, with a single bathroom being fairly common as well.

Bedroom Count

The vast majority of homes are have three bedrooms.

Garage Stall Count

There is near parity between properties with no garage and a one-car garage. A two-car garage is not uncommon either.

Total Square Footage

This metric includes above-grade living area and basement space for a combined figure. The median total square footage for the neighborhood is ~2,200 sq. ft.

Gross Living Area

Level Count

The majority of properties are three levels in this neighborhood.

Lot Size

The lion’s share of properties are on lots 0.06 ac – 0.119 acres (~2,610 sq. ft. – ~5,180 sq. ft.).

Sales Price

This histogram includes sales prices over a 20-year period. The median sales price over the last 20 years is: $359,000; and the median sales price over the last 2 years is: $530,533.

The highest sales price obtained in the neighborhood (on the open market) was $1,500,000 on 6/13/2018. The home is over 6,000 total square feet; sits on one of the larger lots for the neighborhood; has a sauna & pool; and has a studio!

# of Sales

The number of sales in the neighborhood have been trending lower this year as compared to the previous two.

So, there you have it, a market overview for the South Portland neighborhood!

Appraisal Reports